San Antonio is considering a tax increase for 2027 bond
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The San Antonio City Council is mulling whether to raise taxes to avoid cutting the next bond program in half amid a tight budget.
Why it matters: Locals are already feeling the squeeze from high gas prices and inflation. Elected officials have to either raise rates to continue delivering big infrastructure improvements — or decide to do fewer city upgrades.
The big picture: The city typically asks voters to approve a bond every five years to finance major projects outside its yearly budget. But it still only covers a fraction of the needs for streets, sidewalks, drainage and parks in a booming and sprawling San Antonio.
- "We have a lot of needs. There are more needs than we probably can afford," Michael Shannon, director of the city's new Capital Delivery Department, told councilmembers last week.
Reality check: 2027 could be the first time the city's five-year bond program does not grow in size.
Flashback: In 2022, San Antonio voters passed a record $1.2 billion bond program that covered 183 projects across six propositions: streets, bridges and sidewalks; drainage and flood control; parks and recreation; library and cultural facilities; public safety facilities; and affordable housing.
- City officials have previously said San Antonio's capacity for a May 2027 bond could be just $625 million while trying to cover largely the same categories.
The latest: In order for the next bond to be as large as the last one, the city would have to raise the tax used to pay off city debts, Troy Elliott, the city's chief financial officer, told councilmembers last week — though the city has not said by how much. That tax rate currently sits at 21.15 cents per $100 of taxable value.
- Whatever the size of a 2027 bond, some of it could go toward potential infrastructure upgrades around a new downtown Spurs arena.
What they're saying: Councilmembers appeared split or uncertain on raising the debt service tax rate. At least a few were open to it.
- "Maintaining the investment that we had in the last bond is extremely important for us," District 4 Councilmember Edward Mungia said.
The other side: "Under no circumstances should we consider that," District 10 Councilmember Marc Whyte said. "We need to live within our means, and if that means a $625 million bond, then that's exactly what we need to deal with."
Zoom in: The timing of next year's bond election is also in flux. Voters could see it on the ballot in November 2027 after the city moved its elections to November in odd-numbered years.
- But a majority of councilmembers said last week they favored a May 2027 bond election in order to get ahead on inflated construction costs.
Zoom out: A tax rate increase for the bond isn't the only tough financial decision facing the council. City officials are also proposing a regular tax rate increase for the yearly budget, which would be the first in more than three decades.
- Plus, the San Antonio Water System is set to ask the council to raise rates on customers.
What's next: City officials expect to have more information about the amount of a potential tax rate increase by August.